We're two Italian developers, and we're about to release a software technology in open beta. However, we're not incorporated as this is a long-term side project of ours and we're both employed somewhere else. We are concerned about the possible implications of not incorporating before going public, do you have any suggestions on that?
Incorporation offers levels of protection from lawsuits, as well as tax benefits. Personally, I'm all about making sure business structures are in place. However, it's completely up to you, and your comfort levels with the risk.
If you collect personal information, especially in the EU, you will probably want to incorporate to protect your personal assets in case you violate privacy concerns, or have security issues that cause your client's/customer's data to not remain confidential. Remember that a business is a separate entity, so if a business violates privacy laws, it is the business that is liable, but if you (personally) do it, you're personally liable, for any fines/lawsuits/etc.
The best advice would be to sit down with an accountant and/or an attorney (solicitor). They can go through, in detail, what your risks are, both legally and financially, as well as what benefits/detriments you might have of creating a business.
Hope this helps, let me know if you need more info. It's really hard to discuss these general questions without more specifics.